An employee's pay statement includes gross wages, a Section 125 health premium, a traditional 401(k) deferral, federal income tax, Social Security and Medicare tax, a child support withholding, and union dues. In what order must the payroll system apply these items? A Compute all taxes on the gross wages first, then subtract each deduction in the order the employee elected it. B Subtract the union dues and the child support order first, then the pre-tax items, then the taxes. C Subtract every deduction, pre-tax and post-tax alike, and then compute the taxes on the remainder. D Subtract the pre-tax items, compute the taxes, then take the child support order, then the union dues.
Practice questions based on the PayrollOrg Fundamental Payroll Certification content outline and on federal payroll authorities including IRS Publication 15 (Circular E), Publication 15-A, Publication 15-B, the Fair Labor Standards Act, and the Consumer Credit Protection Act. FPC and CPP are marks of PayrollOrg; this site is not affiliated with or endorsed by PayrollOrg. Amounts that are adjusted each year — wage bases, contribution limits, the minimum wage, mileage and per-diem rates — are given inside the question rather than tested from memory, and state-specific rules are out of scope. Confirm the current content outline and the current-year figures from the official sources before testing.
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